heruamon said: Errrr....EA's boss said something similiar about a week ago...Price cuts for consoles were too little too late... |
Of course they did. It's like those who sell cars to make money and those who sell petrol. If I sell petrol so far as I'm concerned (in purest terms) the cheaper cars are the better - and the unrealizable ideal would be if they were free. That way I get to sell more petrol and make more money.
If I'm EA or Activision or any publisher the cheaper the consoles are the better from my point of view. It's not my problem MS and Sony, for example, put in expensive tech or have to sell at a loss - I sell games and the more consoles sold the better. Simple price elasticity indicates the cheaper something is the more it will sell (ignorning other complications and underlying demand and market size of course) and therefore the cheaper the better for the HW to produce a bigger market for the games.
The caveat for the console makers (and the complication) is they get a cut on the games, too (so far as I'm aware). Otherwise the situation would reverse nicely and they'd want games to be free to encourage the most people to buy the console to get at them. I imagine that is the nub of the situation which makes EA, etc. feel they have a fair claim on the HW side as they only make money on the games while in theory the console makers can make money on the HW and the consoles. Of course, the fact the console might be sold at a loss is the other complication as the console makers then need to balance the money from more games vs the loss from more consoles to try and pick the sweet spot.